The Finance Minister rolled out the Budget in the back drop of the very difficult scenario of the pandemic and also the sliding economy of the last year.
Overall the Budget has been a balancing act keeping in mind the thrust required and also taking into account the economic indicators spelt out by the Economic Survey of India announced recently.
The four pillar strategy considered was of containment, fiscal, financial and long term structural reforms.
Below are the top 11 highlights from the budget –
1. Infrastructure development – finance institution for debt financing to be set up by Govt.
2. Asset Reconstruction Company and Management Company (ARMC) will handle existing stressed debt. If this approach is taken seriously, then the stressed assets may be sold out to interested buyers even at a reduced price but perhaps it will be given a new lease of life.
3. PSU banks proposed to be re-capitalized up to INR 20,000 crores. The NPAs and large scale frauds in the Banks have eroded the equity and need beefing up, along with better controls.
4. A new institution to buy debt securities; infrastructure debt funds to be allowed to raise capital through zero coupon bonds; infrastructure trusts to be facilitated to borrow from foreign portfolio investors (FPIs)
5. A single securities markets code to be created by consolidating four existing statutes, covering capital market, depositories, securities contracts, and government securities regulations.
6. Two PSU Banks to be privatized; disinvestments of Air India (in process) and three public sector enterprises to be completed in FY 2022. The ailing PSUs under fresh management would shed the baggage and come out of the woods.
7. Monetisation of public assets such as roads, railways, oil and gas infrastructure, power transmission infrastructure, warehouses, sports stadiums, is proposed. Large tracts of land lying waste which would be better utilized by private/commercial parties.
8. Gold Exchange Centres under SEBI to be established at selected places to act as a regulatory bodies. Warehousing and Vaults are also planned for this purpose under a separate authority.
9. To align with the National Education Policy a Standard Setting Body to be established to grant accreditations etc. This will facilitate uniformity and ensure that the education system is streamlined.
10. Custom Duty structure to be rationalized by removing redundant notifications. This would simplify as about 400 notifications issued over a period of time may be phased out.
11. 7 Textile Mega Parks are being set up to boost the lagging Textile Industry under the MITRA scheme (that is Mega Investment Textile Parks). This would go towards making India the world clothier and generate employment as well.
The Budget announced by the Finance Minister has been hailed as the Best Budget in recent times.
Given the adverse circumstances, the Finance Minister has announced several policy initiatives to give the necessary boost to infrastructure by allocation capital expenditures of about Rs 1.70 trillion in highways, transport infrastructure and pipelines(National Infrastructure Pipeline)
This would create a minimum of 2 Cr job opportunities.
Other initiatives include about Rs.22, 000 Cr for power and renewable energy sector.
Sea ports, inland waterways and airports have also been considered as a thrust area.
Collectively, the Budget has in general received a big thumbs up by the Industry bodies and this has also been reflected in the Sensex touching a historic high of 51,000 mark recently.
Author- G.SRIKUMAR,FCA. INDEPENDENT DIRECTOR
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